Morning View: Budget u-turn is result of deep Tory divisions

The mini budget unveiled yesterday by the Chancellor Jeremy Hunt had been so well trailed by him that it lost shock value.

We all knew things were bad financially and that tax rises and spending cuts were coming. In the event it didn’t seem so bad.

Some pain came via things that didn’t happen, such as not lowering the basic rate of income tax from 20% to 19%, or freezing tax thresholds (which increase tax imperceptibly, because people only pay more as their salary rises with inflation while the exemption allowance does not).

A stamp duty cut on home purchases announced by Liz Truss and Kwasi Kwarteng will stay in place but come to an end in 2025.

Cuts in government expenditure have been disguised by grants such as the £200 payment to Northern Ireland households to help them fund energy costs.

There is no disguising what has happened politically, though. Something akin to a civil war in the Tory Party has for now been resolved in favour of cautious figures such as Rishi Sunak and Jeremy Hunt.

They have in effect over-turned not just the policy of Truss and Kwarteng of unfunded and radical tax cuts but the philosophy that underpins it. And this in time will cause great dissent within the Conservative Party. It is not entirely dissimilar to the bitter divisions in the Republican Party in America, between moderates and Trump supporters.

In Northern Ireland, however, we face a heightened political problem.

Not only is Stormont down, but the prospects of its return seem poor, given that London is heading towards an EU deal that will probably leave the Irish Sea border largely intact.

The UK government ought to take full control of NI politics for a few months, but has instead accepted the notion that it cannot do this without Irish input.